How Business Credit Reports Helps You Know Your Customers Better

Your business has a credit score that is similar to your personal credit score. Knowing what your business credit report says – and that of your business partners, vendors, and suppliers can play an important role in helping you manage your business.

What Is a Business Credit Report?

A FICO score tells lenders and creditors about your personal use of credit. It compares debt, available credit, payment history, and notes any defaults or judgments. Businesses use this information to make lending and credit decisions for consumers.

Your business credit score works in much the same way.

There are some significant differences between a personal credit score and what might show up in your business credit reports.

For personal scores, there is a fairly standard way to calculate credit. It is not that way with a business credit report.

Each of the major credit reporting agencies approaches the process a little differently and reports differently.

As a consumer, you are entitled to a free credit report annually. Some credit card issuers will also let you see your FICO score. It is not that way for businesses.

How Can I Use a Business Credit Report?

There are two specific reasons why you need to buy business credit report summaries. However, you will use them in different ways.

1. Research Your Vendors and Suppliers

If you are doing business with a new supplier, planning to place a large order, or deciding whether to provide credit to a new customer, a business credit report can help you gauge their financial situation.

You can find out whether someone pays their bills on time, has a lien or judgment against them, or if they are in danger of bankruptcy in the coming year.

This can help you make better business decisions about who you conduct business with and under what terms.

• Avoid Credit Risks
  Avoid doing business with customers or suppliers that don’t pay on time or deliver on schedule.
• Know When Problems Arise

You never want to be the last to know when customers or suppliers are having financial problems.

• Better Manage Your Cash Flow
  Knowing the financial health of your customers and how quickly they pay their bills can help you better manage your cash flow.

2. Research Your Business

It is also important to understand how others view your business from a financial perspective. Even if things are going well, it helps to know where you stand. 

A strong business credit score can help you:

• Get Better Financing Terms
  If you apply for a loan or line of credit, lenders will look at your business more favorably with a good credit score. It can make it easier to be approved for loans and you may qualify for larger business loans as well as better terms.
• Get Better Credit Terms
  Just as you would use a business credit reports to determine whether to provide credit to a business customer, other businesses will use your credit report to determine your creditworthiness and repayment history. With a good credit score, you will have an easier time getting credit from your suppliers and may be able to negotiate better terms.
• Get Reduced Insurance Costs
  Business insurance can get expensive. A strong credit score may help you lower your insurance rates.

If you know your business credit score, it can give you the confidence to negotiate better conditions.

Before you apply for a loan or ask for a credit line, you should review your business credit report to be sure it is accurate.

If you find inaccuracies, you can gather the evidence you need to contest them. If there are blemishes on your record, it helps to have an explanation ready in case you are asked about them.

Business Credit Report Companies

Three major credit agencies provide business credit reports:

1. Experian
2. Dun & Bradstreet
3. Equifax

Each company uses different data sources to create its reports and assigns business credit scores.

They also report information differently. So, you need to compare the options and view samples of each company’s reports to determine which one is best for you.

Each one has its pros and cons depending on how you want to use the information. 

Experian provides a top-line credit score. The Intelliscore Plus report analyzes multiple variables to evaluate the probability of serious credit delinquencies in the coming year.

Equifax provides a credit risk score, business failure risk score, and a delinquency score. Dun & Bradstreet focuses on the timeliness of payments by businesses. Its Paydex score predicts how quickly you will get paid.

Buy Business Credit Report

If you need to buy business credit report summaries, you should compare what’s available from Experian, Equifax, and Dun & Bradstreet.

Find the right business credit report for your business and download it instantly without having to sign up for a long-term subscription.

accredit allows you to find the business credit report you need and download it directly without having to sign up for any long-term subscriptions.

 

Tags: business credit report, buy business credit report

Category: Business